Wooden Exports: Creating Opportunities in the US

Wooden Exports: Creating Opportunities in the US

The Trade Department, the Wood and Fine Arts Association and Saigon Times, in conjunction with Furniture Today magazine, organised a seminar on wood export opportunities to the American market on July 10, 2004. Participants at the seminar included 40 leading wood enterprises in Vietnam and several American wood importers and shipping lines.

Trade promotion and opportunities

With an increased export value and favourable markets, trade promotion organisations are stepping up the introduction of Vietnamese wooden products into the international market, especially in the American market. At the seminar, representatives of Furniture Today magazine provided Vietnamese wood enterprises with market information and opportunities. Representatives of famous Furniture Brands International introduced American consumer tastes and methods to enter the American market. It is reported that the group has ordered roughly one hundred containers of wooden products from Vietnamese enterprises each month. For their part, Vietnamese enterprises have presented their supply capacity so that the magazine can provide information of Vietnamese wood enterprises to American consumers.

The publication in Furniture Today is an important step for the preparation of the Export Fair Expo 2004 on wooden products and fine art articles to be organised by the Trade Department, in Ho Chi Minh City from September 29 to October 3, 2004. Furniture & Furnishing Export International (Singapore) is also expected to introduce products at the fair. The magazine has publications throughout Asia and has registered for a pavilion at the Expo 2004. Two other magazines focusing on wooden products in Europe will also to provide business information at the fair, helping Vietnamese businesses to approach the market.

Vietrade (Trade Promotion Department, Ministry of Trade) disclosed that Mr Tran Duy Dong, the Vietnamese commercial attaché to the United States is taking a delegation of American wood importers and reporters to visit Vietnamese wood processing companies from July 8-17, 2004. The delegation will visit 30-40 wood processing enterprises in Binh Duong, Dong Nai, Binh Dinh and Ho Chi Minh City. It is also reported that in late April 2004, Vietrade and 15 Vietnamese enterprises participated in the Highpoint wooden product fair in the United States.

Large demand but small supply

In the first half of 2004, the wooden product export value was US$493 million and foreign importers continue to demand greater quantities from Vietnamese enterprises. However, can the demand be met? The Director of Saigon Wooden Furniture and Decoration (SMD) said that his company had to refuse a number of contracts because of their limited production capacity (150 workers).  With just 1 or 2 contracts, the company had work for the whole year. Mr Huynh Kim Bau, Director General of Saigon Furniture, said that his company has 600 workers and exports 90 per cent of its products, but due to low standards and quality the company could not sign big contracts. The company will install a new production line and sign a contract with an American company for 800,000 - 1,000,000 chairs in 2005.

Although the Vietnamese wooden product industry has made impressive progress in recent years its capacity falls well short of demand, especially from the American market. Only with large-scale production and stable quality can Vietnamese enterprises meet the export demand. Many wood processing enterprises are invested in by foreign partners with capital, technology, training and outlets for products. If Vietnamese enterprises have foreign partners, they can further promote lasting cooperation.

Ms Le Hai Lieu, Director of Duc Thanh company said that despite its opportunities and potentials, Vietnam has to compete with other countries with a higher production capacity and bigger market share. According to the Trade Ministry, Vietnamese wooden product exports make up only 7.3 per cent of the Japanese market, 0.86 per cent of the United States market and 0.2 per cent of the EU market. Some measures have been discussed to boost the export of wooden products, such as assistance in capital to expand and increase production. Improvements in policy and formalities are also needed for business activities. The skill of the workers is also a problem, exemplified by Duc Thanh, as 95 per cent of its workforce were unskilled labourers that the company had to train from the outset. Furthermore, as investment and technology require big sums of money, the State must plan to avoid waste and unhealthy competition.

• Song Phuong